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Management happens
Of course these people are not all fools. They are usually smart,
well-trained, and hard-working. It is just that they have no
clue about the numbers describing their own business – and
managers usually don’t. We spend a lot of time, money, effort,
and attention quantifying all sorts of aspects of our organiza-
tions but, at the end of the day, make decisions ignoring all these
numbers, using instead our experience, qualitative assessment,
and gut instinct. And that’s probably for the better; if we based
decisions on our (alleged) knowledge of the numbers, we’d be
prone to shoot ourselves not only in the foot, but also in the
chin, the head, the backside, and the bodily parts of several of
our neighbors.
How to make a compelling corporate strategy in six
easy steps
Numbers and analysis seem to form part of the corporate façade
of structured decision-making. However, over the years, my
observations of how the strategy process in corporations is
usually organized is quite different. It usually seems to consist of
six consecutive steps.
Step 1: On October 15th (or whatever day and month),
we send a memo to our business unit managing
directors that we will need their unit’s strategy input
by December 1st, including an explicit elaboration of
how it ts in with the corporation’s overall strategy.
Step 2: BU’s management thinks, “What was the corporate
strategy again?” and looks up last year’s document.
Step 3: It takes note of what its business unit’s input needs to
be – in terms of the guidelines provided by corporate
– and, after a week or so, assigns some junior staff
members, consultants, or interns to provide the
numbers about the market, forecasts, benchmarking
(in terms of what competitors are doing), and so on.
They give them last year’s document and also send
round an e-mail to all team leaders urging them to
Business Exposed20
provide the necessary data (“because it is that time of
year again” and corporate wants it by December 1st).
Step 4: After two weeks, BU management thinks, “Wonder
how that is going?” and nds out that the team
leaders have been slow to provide the necessary
information. After another e-mail (marked “urgent”),
information starts owing in and by mid-November
there is a big pile of data. In the subsequent two weeks
(while ipping through last year’s documents a bit),
they write a number of pages about what the unit
has been doing over the past year (which corresponds
remarkably well with what they said last year they
would be doing), what they will be doing next year
and how it is all contributing to (yes, even driven
by!) the overall corporate strategy. On December 1st,
we note from our e-mail inbox that we received their
document last night on November 30th (just in time!),
at 11:37pm, which makes us realize, with a slight
feeling of guilt, that we had just gone to bed at that
time (after nishing a rather good bottle of Australian
shiraz).
Step 5: The next day, we ip through the various units’
strategy documents and put them aside. Some time
during the rst week of January, we ip through them
again and take last year’s corporate strategy document
out of the drawer. We then think about all the
activities the corporation is engaged in and – usually
with the aid of our strategy department or, in the
blissful absence of such a group, a consultant or two
(they usually hunt in packs) – we come up with some
overarching logic (and a quite compelling one, we
proudly congratulate ourselves) of why we are doing
the various things we’re doing anyway.
Step 6: On February 1st, we send the document to all
company directors and business unit managing
directors. They look at its shiny cover (with a picture
of us standing in front of our new corporate building
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